EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608556
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Bluescope Steel Ltd applied for a TCO in respect of certain dischargers on 16 May 2006.
Instrument
TCO No 0608556 was made on 4 August 2006. It declares that those certain dischargers are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is 0%.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0608556 is taken to have come into force on 16 May 2006.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901 was enacted to provide for the imposition and collection of customs duty and the regulation of imports and exports. One of its mechanisms, introduced to address the need for tariff concessions on certain imported goods, is the Tariff Concession Orders (TCOs) scheme. This scheme allows the Chief Executive Officer of Customs to grant lower rates of customs duty on specific goods, provided the application for a TCO meets the core criteria outlined in the Act. The objective is to ensure that the goods are not substitutable by Australian-produced goods and are imported under specific circumstances that warrant a tariff concession. The Customs Act 1901, administered by the Parliament of Australia, aims to facilitate trade by providing tariff relief where appropriate, thereby encouraging the importation of goods that are not domestically produced or are necessary for particular uses.
Scope and Application
The Tariff Concession Instrument No. 0608556, made under the Customs Act 1901, applies to entities or individuals who have applied for tariff concessions on specific goods. This instrument specifically pertains to Bluescope Steel Ltd's application for tariff concessions on certain dischargers, which the Chief Executive Officer of Customs has approved. The application of the instrument is limited to goods that are not produced in Australia and have no substitutable goods produced domestically, in accordance with the core criteria set out in section 269C of the Act. The instrument provides a tariff rate of 0% for these specified dischargers, down from the general rate of 5%. The instrument has national reach, applying across Australia in line with the Commonwealth's legislative authority. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons other than the Commonwealth. It is effective from the date the application was lodged, 16 May 2006, and allows for the possibility of duty refunds to importers as per the Customs Act Regulations. The instrument’s application can be extended or further defined through subordinate instruments made under the authority of the Customs Act.
Key Provisions
The primary sections of the Customs Act 1901, as applied in Tariff Concession Instrument No. 0608556, provide the framework for the creation of Tariff Concession Orders (TCOs) through section 269F. This section allows for applications to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. If the CEO is satisfied that the application is valid and pertains to goods that are not excluded under section 269SJ, the CEO must then determine if the application meets the core criteria outlined in section 269C. This criterion requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO determines that the application meets these criteria, they are required under subsection 269P(3) to make a written order declaring that the goods in question are subject to a specified rate of duty as outlined in Schedule 4 to the Customs Tariff Act 1995.
In relation to the obligations and requirements imposed by this Act, section 269K mandates that the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice includes an invitation for any person to lodge a submission if they believe there are reasons why the TCO should not be made. This ensures transparency and allows for stakeholder input. Additionally, the Act requires that the TCO does not adversely affect the rights of any person other than the Commonwealth, nor impose any liabilities on such persons in respect of actions taken before the TCO's registration date. This protects the interests of those who might be affected by the concession.
Regarding the consequences of breaching the provisions of this legislation, the Act does not explicitly outline specific criminal or civil penalties for non-compliance with the TCO requirements. However, any breach of the Customs Act 1901 in general can result in severe penalties. For instance, under section 226 of the Act, any person who commits an offence against the Act is liable to a penalty of up to 10,000 penalty units or imprisonment for five years, or both, depending on the nature and severity of the offence. The Act also provides for additional penalties in cases involving fraudulent conduct, which can lead to more stringent consequences including higher fines and extended periods of imprisonment. The Customs Tariff Act 1995 further reinforces these penalties, ensuring that any misuse of tariff concessions is met with appropriate legal repercussions.